Home' Asian Aviation : AAV Dec Jan 2010 Contents Sam Chui
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MRO Asia Report
High taxes on the import of aircraft parts are
stalling the growth of the Indian MRO industry.
The taxes of 42 percent comprise 18 percent
for customs duty, a 12 percent sales tax and a
12 percent service charge. This is prompting
Indian carriers to outsource heavy maintenance
of their aircraft to third parties outside the
country, mainly in Europe, Malaysia and
"This is not only a high cost for the
airlines concerned, but also a loss of foreign
exchange," says Raghu S Menon, executive
director of Air Works India.
Air Works is an independent MRO centre
based at Mumbai International Airport,
servicing Augusta Westland, Bell Helicopter,
Bombardier, Gulfstream and Honeywell
products. The company, which started
operations in 1951, is owned by the Menon
family in India.
Over the years, Indian carriers have held
talks with authorities to abolish or at least
reduce the import taxes but the effort has so
far been in vain.
"These high taxes are stifling the
development and growth of the Indian MRO
industry," Menon says.
Another hurdle the national industry faces is
that Indian carriers are not prepared to invest
their money into setting up maintenance
facilities and purchasing the required tooling
and equipment. Lack of space to build MRO
facilities at airports and harsh regulatory
restrictions are other factors cited by Menon
that need to be addressed by the Indian
Another problem is the shortage of
qualified personnel. "The success of MRO
depends on the availability of skilled labour,
but India is confronted with a shortage of
licensced aircraft maintenance engineers,"
High taxes stifle Indian MRO growth
Singapore Airlines Engineering (SIAEC) has
signed an agreement with Panasonic Avionics
to set up a joint venture offering MRO services
for in-flight entertainment and communications
(IFEC) systems and components produced by
the Japanese company.
PAC will own 57.5 percent of the Singapore-
based venture, while SIAEC will hold the
remaining 42.5 percent. Work on the state-of-
the-art MRO facility is expected to start early
The venture will help meet growing demand
for IFEC support on new-generation aircraft. It
will enable airlines in the Asia-Pacific region to
benefit from one-stop solutions and support
from the original equipment manufacturer.
SIAEC Chief Executive Officer William Tan
said the venture will support Panasonic's
latest products, including the eX2 IFEC system
installed on the Airbus A380.
SIAEC, Panasonic form
IFEC joint venture
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